Q. With reference to taxing power in India which of the following statements is/are correct?
1. State legislature has more subjects to levy tax in comparison to Parliament.
2. Profession tax levied on any person under the state list should not exceed 2500 per annum.
3. Wealth tax or expenditure tax can be imposed by Parliament under the union list.
Select the correct answer using the code given below:
Answer: A
Notes:
Exp) Option a is the correct answer.
Statement 1 is correct. State legislature has exclusive power to levy taxes on subjects, which are 20 in number, enumerated in the state list. On the other had union list has 15 subjects and concurrent list has only 3 subjects on which tax can be levied.
Statement 2 is correct. A state legislature can impose taxes on professions, trades, callings and employments. But the total amount of such taxes payable by any person should not exceed 2500 per annum.
Statement 3 is incorrect. Parliament has imposed gift tax, wealth tax and expenditure tax under the residuary power of taxation. Under this Parliament is vested with power to impose taxes not enumerated in any of the three lists.
